Some brokers are reporting a hardening in lenders’ attitudes to individually-negotiated discounts while others report that lenders are still willing to trade on rates as well as the add-on charges associated with loans.
Mike Pero Mortgages broker Chris Downes says that there is little to distinguish between the major banks on the pricing of their fixed rates.
“You could throw a blanket over them all,” he says. But the advertised rates are not necessarily the rates the banks lend at; they will negotiate discounts.
Mortgage Link broker Charlie Reid agrees. “In the majority of cases the bank will move.”
But one Auckland broker reports that lenders are reluctant to negotiate. However, all agree that the banks are moving quickly to match one another on rates. Borrowers need to be nimble to catch the best deals.
Reid says: “A deal is all about timing. What’s a good deal today may not be a good deal tomorrow.”
Reid says that for borrowers, the choice between one lender and another may be determined by the terms they offer for holding a fixed rate while a transaction is completed.
The market is waiting for the next review of the Official Cash Rate on March 8. Economists are increasingly convinced that the OCR will rise from 7.25% and that interest rates in New Zealand will stay higher for longer than expected last year. The Reserve Bank has expressed concern about continued strength in house prices.
Downes has noted some reluctance among younger borrowers to commit themselves to purchases even when mortgage finance has been pre-approved. He believes some buyers are becoming resistant to prices in the current market.
National Bank, Bank Direct, Westpac, BNZ and ASB, Sovereign and PSIS have announced increases on some fixed terms over the past week. Kiwibank increased one and three year rates and cut rates on other terms.
Lenders and brokers say that margins remain tight in the mortgage market.
